Big deal on federal deficit not dead yet, Obama says

In a White House press conference, President Obama rejected Republican suggestions that the deficit talks be scaled back to aim for $2.5 trillion in spending reductions.

President Obama still wants to go big on deficit reduction, and he’s using his bully pulpit to make his case. In a White House press conference Monday morning, Mr. Obama insisted that “now is the time” to address long-term debt and deficit issues with a combination of spending cuts and increased revenues.

Obama ruled out a short-term measure to stave off imminent default. The president also rejected Republican suggestions that the deficit talks be scaled back to aim for $2.5 trillion in spending reductions rather than a $4 trillion-plus package that would include revenue enhancements – achieved by closing tax loopholes, ending some corporate subsidies, and limiting tax deductions for the wealthy.

Despite Republican assertions that a larger package is politically unworkable, Obama declared that there’s no better time than the present for action.

"Now is the time to deal with these issues. If not now, when?" Obama told a packed White House briefing room. "I've been hearing from my Republican friends for quite some time that it is a moral imperative for us to tackle our debts and our deficits in a serious way. I’ve been hearing from them that this is one of the things that is creating uncertainty and holding back investment on the part of the business community. So what I’ve said to them is, 'Let’s go.' "

The federal government faces a deadline of Aug. 2, at which point it risks beginning to default on its debt obligations. Obama’s assertions came the morning after a 75-minute Sunday evening meeting with congressional leaders that reportedly made no progress, and two days after House Speaker John Boehner rejected continuing the effort to reach a larger-scale agreement that includes tax reform.

At 2 p.m. Eastern time, Obama, Vice President Biden, and bipartisan leaders from both houses of Congress meet again at the White House.

Both Obama and Speaker Boehner are encountering fierce headwinds from their political bases over core issues – for Democrats, entitlement programs, and for Republicans, taxes. Obama acknowledged the political difficulty Monday.

“The leaders in the room at a certain point have to step up and do the right thing regardless of the voices in our parties,” he said. “It’s going to take some work on his [Boehner’s] side. But look, it’s also going to take some work on our side to get this done.”

Obama indicated that changes to Medicare, Medicaid, and Social Security will have to be part of the mix, even though the last of those three – Social Security – is “not the source of our deficit problems.”

In an effort to reassure Democrats, Obama said changes to those programs would preserve their integrity and “keep our sacred trust with our seniors, but make sure those programs were there for not just this generation, but for the next generation.” The president was not specific about what changes he would allow. Democrats in Congress are concerned that he will give away too much to secure a deal.

Obama also made clear he understands the pressures Boehner is under, particularly from the energized tea party movement (which he did not mention by name).

“My experience with John Boehner is – has been good,” said Obama, calling the speaker a “good man who wants to do right by his country.”

“The politics that swept him into the speakership were good for a midterm election; they’re tough for governing,” Obama said.

Boehner held his own press conference early Monday afternoon. While he agreed that "we cannot allow our nation to default on our debt," he also said, "The American people will not accept – and the House cannot pass – a bill that raises taxes on job creators."

At the White House briefing, Obama was less charitable toward the Republican caucus as a whole, scolding them for not wanting to take the hard steps needed to address the big picture of the nation’s unsustainable fiscal future. With the 2012 election season already heating up, Obama asserted that the longer they wait, the harder it will get.

He ruled out a stopgap deal that kicks the can down the road 30 days, 60 days, or 90 days.

“It's not going to get easier; it's going to get harder,” Obama said, trying to burnish his image as the adult in the proceedings. “So we might as well do it now – pull off the Band-Aid, eat our peas.”

• Material from The Associated Press was used in this report.

---

Related video:

[ Video is no longer available. ]